10th June 2009 - Last date to finalize your booking!
Deepak, thanks for giving this breaking news! When i called the site office of Nanded City Pune, a salesman confirmed the news about the reduction of property rate to Rs. 2,500 per sq.ft.
Now, instead of Rs. 2,750 per sq.ft., till June 10, 2009, you can finalize your booking at Rs. 2,500 per sq.ft. he said.
What is your take on the property price reduction at Nanded City Pune?
You may remember that Rs. 2,750 was the special pre-launch invitation offer for the residents and "family members" of Magarpatta City and Nanded Village.On 1st of June 2008, when Nanded City Pune was launched and bookings opened for all, property rate was Rs.3,250 per sq.ft., which eventually went up to Rs.3,500 per sq.ft.
Now, at this point of time, when you don't believe in booking in a project where work has just started, i wonder what Nanded City Pune is going to achieve by reducing the property rate to Rs. 2,500 per sq.ft!
I feel this is not the price reduction but serious devaluation of the 700 acre integrated township. Instead of motivating the property buyers, this reduction in the property rate is going to demoralize the existing buyers who had expressed their confidence by taking early decision to confirm their bookings.
These property buyers are going to ask themselves, "Why Rs. 2,500 per sq.ft.? Why not Rs. 2,300 or Rs. 2,200 per sq.ft.?
When Nanded City Pune asked for Rs. 2,750 per sq.ft. i did not ask for the justification. I didn't bother to see the plan or any details. I trusted Nanded City Pune.
Now, when they themselves, the promoters of Nanded City Pune, don't trust in the value of their project, how can i trust it? How can i believe that Rs. 2,500 per sq.ft. is the right property price? I won't make the same mistake again!"
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It is going to create a doubt in the minds of property buyers like you, who haven't confirmed your bookings yet, about the possible depreciation of the property in 2 years down the line, when it will be ready for possession. When your sentiments will become completely negative, you will consider "lock in period" as a trap and not a protective net around your investment.
Am I right? Or is this property rate reduction going to motivate you to confirm you bookings in Nanded City Pune? Please, share your views in the comments.
Related Stories:
1) Everybody in Pune is talking about Magarpatta City's upcoming project 'Nanded City' on Sinhgad Road2) Launching of Nanded City, Pune - A farewell to India!
3) Is Nanded City, Pune all about real estate development?
4) Magarpatta's Nanded City Pune closes it's offer of phase 1 with a promise to open 2nd phase in December 2008
5) How many cancellations happened at Blue Ridge?
6) Satish Magar on Nanded City Pune
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Ravi thanks for sharing these details. I have mentioned in your other Nanded City posts as well that rate for booking in Nanded project should be around 1200-1400 Rs per sq ft. Construction cost is 800 sq ft at best. They would still make handsome profit of 50-70%. They have not paid for the land so there is no cost for the land. Profit will be shared with the farmer owners of this 700 acre land and Mr Magar's team.
ReplyDeleteThis property will not be ready for possession atleast till 2013 -2014. There is no such industry in this area for the prices to be as high as 2500. People who have booked their flats in Nanded anywhere above 1500 will pay the price in long run.
Ravi, I'm really at a loss when you say that 2500psft is devaluation. Everyone (even you) knows for fact that 2500psft is over-valuation considering all the fact that it will at least take 8-9 years minimum for this city to come up, that is, in case it does manage to take off. Sometimes i really doubt ur side when you claim that you are an independent RE consultant.
ReplyDeleteThere was tremendous pressure on Nanded city management from first 5000 people who booked @Rs. 2750.
ReplyDeleteEarlier when there were lot of cancellations, they reduced the rates from 3250 & 3500 to 2750 but for those people who booked at 2750,there was not monetary benefit and many of these people were real owners ( farmers) of the project.
The rate reduction is actually for these people and other people are going to benefit from the same.
The real complaint is going to be from old investors who paid 10% of their home value an year ago. Nanded city has just used their money for 1 year without giving any benefit to them. One can today book a flat in Nanded city @ 2500.
That’s where the confidence of the investor is reduced. Being indirectly politically backed project and NCP not doing too well will have its indirect implications on this project too.
I agree with Tosh. Ravi, we should be feeling happy that prices are going down. This is a game of demand and supply. If demand is not there then it needs to be created. Reducing the price is one way to do that. I do not think it will create any negative impact in people mind as such. Still, I feel 2500 is out of reach of normal person including so called IT professionals...
ReplyDeleteAlso, as per my knowledge this project does not fall under PMC limit. Plus connectivity is also a problem.
well, ravi why are you disturbed if rates are falling. It was due long time.
ReplyDeleteI would nto even pay 1000 rate for such a remote location and these guys were asking a 3000+ rate which was ridiculous.
I know you are RE salesman and it is natural for you to be worried if rate fall. But see the bigger picture, unless rate fall, real transactions will never happen and you'll face even more trouble.
I say most premium property in Pune should not cost more than 2000per sq ft and others below than that accordingly. This is the right VALUATION and not devaludation.
For nended city, rate reduction is not devalutaion brcause there is no value at all for such location and price combination.
What do you think Ravi, when would be the minimum amount of infrastructure ready for anybody to lead a comfortable life at Nanded City counting from today?
ReplyDeletePlease correct me if i am wrong:
By infrastructure i not only mean basics like road, water electricity, i also would include shopping malls, schools etc.
In short a system that would be self-sufficient in itself.
Nanded City today is in the middle of nowhere.
good news !! at least one builder is reducing prices. Rest will follow suit, remain assured.
ReplyDeleteGM is going to declare bankruptcy and satyam is going to sack 8k people. these events will surely lead to further correction.
Always, the builder tries to promote myths like:
ReplyDelete1. Property prices always go up
2. What if property rate has come down? It does not matter if you are living in your house.
Now try justifying these myths to the property buyer in Nanded City who booked at 3250 per sq ft!
Maybe the buyer at 3250 per sq ft should try to cancel his booking. If he gets his money back, he can rebook the same flat at 2500 per sq ft :):)
I have booked in Nanded city at 3250 which was later reduced to 2750 and now again reduced to 2500. That too without any written confirmation to any body. Seeking opinion should I opt out of the investment.
ReplyDeleteHi Ravi its not that hard to believe that Nanded City promoters themselves have reduced the price to 2500.
ReplyDeleteThey have done nothing great just trimmed down a fraction of their super fat profits here.
And now if you are wondering what would be the right price for this Nanded thing, then take a hard look at the comment posted by Tosh...:-)
You are right.. This is going to put more ppl in dilemma as to why 2500... why not reduce further.. And guess what? only those fools will be thinking on this who havent done so already. Already there are ppl intelligent enough who know that it is not worth the 2750 or 2500 or anything in these range really...
ReplyDeleteIf one makes a mistake and realises the mistake, it is 'Shahanpan'(clever) to admit it and try to rectify it. Sticking to your price just because it launched with it and not admiting that it might not be worth would be fool hardy!!
# Ref: "rate for booking in Nanded project should be around 1200-1400 Rs per sq ft"
ReplyDelete# Ref: "Everyone (even you) knows for fact that 2500psft is over-valuation "
# Ref: " That’s where the confidence of the investor is reduced. "
# Ref: " Still, I feel 2500 is out of reach of normal person including so called IT professionals... "
# Ref: " For nended city, rate reduction is not devalutaion brcause there is no value at all for such location and price combination."
# Ref: " Also, as per my knowledge this project does not fall under PMC limit. Plus connectivity is also a problem."
# Ref: " Nanded City today is in the middle of nowhere."
# Ref: " good news !! at least one builder is reducing prices. Rest will follow suit, remain assured."
# Ref: " Now try justifying these myths to the property buyer in Nanded City who booked at 3250 per sq ft!"
# Ref: " They have done nothing great just trimmed down a fraction of their super fat profits here."
# Ref: " Already there are ppl intelligent enough who know that it is not worth the 2750 or 2500 or anything in these range really... "
Thanks for the comments! I repeat:
"I wonder what Nanded City Pune is going to achieve by reducing the property rate to Rs. 2,500 per sq.ft!"It looks like that, like me, most of you are not happy. Some about the price. Some about the concept of 700 acre integrated township.
If "not happy" sounds too harsh to you, then i would like to say that
- This price reduction fails to create positive sentiments about Nanded City Pune.
- This property price reduction didn't build confidence about Nanded City Pune in the property buyers mind.
- Is this price reduction going to get the bookings of those reluctant property buyers who were not ready to confirm their bookings?
Ravi, this is in response to ur statement - "I wonder what Nanded City Pune is going to achieve by reducing the property rate to Rs. 2,500 per sq.ft!".
ReplyDeleteMy answer would be NOTHING (yet). They would still need to bring it down to around maybe 2000-2100 psft so that their sales can pick up and the project can take off.
People who have booked at 3250psft should seriously think about canceling.
Real estate in Pune is primarily driven by IT and then investors from Mumbai. All educated people are aware how IT industry is doing right now so I need not explain. For the Mumbai investors most people have lost money since the sub-prime and the sentiment is that rates would still fall.
Other people, builders would also like to argue that Pune is a manufacturing, automobile hub etc. But the point is how many people in this industry earn that kind of money to afford a flat above 25 lacs except people from the senior mgmt layer?
Good to hear that rate is reduced....But can anybody confirmed if the actual total rate of flat is reduced by how much %.
ReplyDelete......As Nanded is following Magarpaatta pattern .....I don't think there will be any change in total cost of flat.
Wow! Finally we see rational comments rather than emotional ones in this section. I too agree that Mr.Magar's team is finally facing the reality. Pune was trailing behind other cities in rates reduction but no more. Nanded city is going to achieve a lot for the common man. It sends a big message that property prices were inflated in Pune and are finally seeing a decent fall. It is upto each individual,now, to decide when does he/she jumps in and buys his/her dream house. Some might prefer to wait while other might not. Nanded City will definitley benefit as they have taken the first step. They will definitley get more buyers as compared to sticking to unrealistic rates. Good for Nanded City and good for buyers. If the rates fall further so be it. All will benefit - buyers because they will be able to afford the houses, builders becuse they will be able to generate revenue, improve their liquidity and make decent profits (and not the obscene ones they used to make earlier)
ReplyDeleteRavi,
ReplyDeleteI dont grudge the builders their profits. But there is a recession going on. Holding on to high prices will only kill the flow of money. The party is over, I wonder will "ghost towns" make an appearence in india this recession? People who invest in houses depend on someone willing to buy and stay in that house at the end of the holding period. If the end user is not there, then there is no point. And houses are not like stocks, they dont pay dividend and they require maintainance. So a "buy and hold" strategy rarely works...
this place does not deserve 2500 per sq ft. magars perhaps do not know that most of the people go to work to make a leaving. and the people who will live in these houses will also have to travel to work, mr magar. their places of work are far from this site. areas like wakad and pimple saudagar are demanding rates which are almost the same. who will go to nanded city if there are choices available in more developed areas such as wakad?
ReplyDeleteJust as a reminder - Nanded City has a clause that you can not sell your flat 3 years from the date of possession. This information is not highlighted by the builder but is put in the contract when you go for buying. So if you get into this property you are locked for atleast 7-8 years before you will be able to sell it (if you want to) because construction of the first phase will continue for 4-5 years and then you will get the possession. It will be hard to rent out flat in this area as it is way off from the work places. With 2500 Mr Magar's profit markup expectation is 200%+. Well it has been reduced from 3500 to 2500 so Mr Magar has "REDUCED" his profit margin from 350%+ to 200%.. Very considerate Mr Magar for the end user, way to go Sir.. :)
ReplyDeleteHi Ravi,
ReplyDeleteIf you think from commom man's perspective, its a welcome move although it is intended to take into consideration the "Business" perspective.
On Sunday evening, I went to Nanded city and I had take an appointment and wait for almost an hour to talk to a sales executive
to whom I could meet easily earlier.
Overall response seemed good and there was some activity on site. Thinking rationally, its a good opportunity for any investor from long term perspective.
Very good to see that major RE player in Pune has reduced the price. In any case, even Rs.2500/sq ft here is too high or several areas of Pune for that matter.
ReplyDeleteThere is nothing in Pune to justify such high prices, no public transport, poor infra, etc. Prices rose only due to IT. As IT is now out, prices have started coming down, something on the lines of Bangalore.
The matter is worse for Pune realtors as NCP faired poorly in Lok Sabha elections & is now looking at funds by divesting in RE for state elections.
Prices in Gurgaon & Bangalore are already below Rs.2000/sq ft range.
Affordability is decreasing. Good link illustrating the same:-
http://business.rediff.com/slide-show/2009/jun/04/slide-show-8-housing-prices-have-begun-to-drop.htm
Hi,
ReplyDeleteDo you know ?
1. Its now 2750 again... and not 2500.
2. Tosh's clause, if true, should be an area of concern...
3. The end location of phase 1 is about 2.5 KM starting from their current sales office.
4. You can not change walls / restructure your apartments in future.. cause there are no pillars.
Ravi sir, I do have one last question ...
Recently they changed their buildings from 11 storeys to 22 storeys due to bad real estate situation. What could be the reason of introducing more flats in such bad market ?
# Ref: "Recently they changed their buildings from 11 storeys to 22 storeys due to bad real estate situation. What could be the reason of introducing more flats in such bad market?"
ReplyDelete- Sorry, i didn't get you. Is it specifically about 11 - 22 or about the total number of flats open for booking?
- About "Bad real estate market" - i am sure, you know the number of applications Nanded City Pune received. The number of flats may not be a proof but sure it reflects how many people have paid 10% to confirm their allotment.
Why add more floors (or more flats) when existing flats are not getting sold out ? Original plan was to launch buildings with 11 storeys .... But now they changed it to 22 storeys which means more flats have been introduced...
ReplyDeleteI thought, they were getting trouble to sell flats from their original plan of 11 storeys buildings... but adding 11 more floors means introducing twice as many flats ...
Why decision like this was taken in such bad market condition ? Or the condition is not as bad as it seems ?
I feel Sinhagarh area is totally out scurt of city. No good school, no good mall and work location is also very far. I found following chart of correct property prices posted by some user.
ReplyDeleteFollow following chart for negotiating prices with builder
Area Rate/Sq Ft.
MG Road 2500-4000
Koregaon Park 2500-6000
Kalyani Nagar 2000-3500
Sopan Bag 2000-3000
Viaman Nagar 1800-3000
Nagar Road 1800-3000
Kharadi 1800-3000
Hadapsar 2000-3000
Wagholi 1200-2000
Kondhwa 1500-3000
NIBM 1500-3000
Wanowrie 1800-3000
Vishrantwadi 1500-2800
Airport Road 1500-2800
Yerwada 1800-3000
Kothrud 1800-3000
Deccan 2500-4000
FC Road 2500-4000
Shivaji Nagar 2500-4000
Model Colony 2500-4000
Sinhgad Road 1200-2200
Aundh 1800-3000
Aundh Annexe 1500-2200
Wakad 1500-2200
Pashan 1500-2500
Baner 1800-2800
Hinjewadi 1200-1800
Khadki 1800-2500
Pimpri 1600-2200
Chinchwad 1600-2200
Nigdi 1200-2000
Pradhikaran 1500-2500
Tathawade 1000-1800
Talwade 1000-1800
Bhosari 1000-1500
Akurdi 1500-2200
Talegaon 1000-2000
Chakan 1000-1800
Thergaon 1200-1500
Ravet 1000-1500
Dehu Road 1000-1800
Dapoli 1500-2200
It is available at following link
http://www.bharatestates.com/blog/index.php/real-estate-prices-in-pune/comment-page-1/#comment-476
Hi Ravi,
Can you comment on the following prices area wise which seems to be quite realistic and correct for property buyers.
Ravi thank you very much for this information I appreciate with the information and would look forward to buy a property in Nanded City.
ReplyDeleteThe rates which has come down is apprecitating.
I was afraid when i heard the price will start from Rs 3500. Thought wont be able to go forward and purchase.
Ravi if you can tell me the rates for Villas/ Bunglows, it would be great help.
I look forward for your reply.
Thanks.
Dear AJ, this blog was written in 2009. Sure, I will write about villas when Nanded City Pune opens booking.
ReplyDeleteWhats the current rate going on in Nanded City... I came across a flat in same area...around Rs2500 / sq ft... is it safe for me to purchase it ...its in shivne gram panchayat...what all documents need i to check from the bulider for the same
ReplyDeleteWhats the current rate going on for nanded city..
ReplyDelete